The shares of Balrampur Chini Mills surged to an 18-month high of Rs. 157 per share, with an increase of over 2% on the BSE. The northward journey in the stock price is buoyed by hopes of strong earnings.
In April, the board of directors of the company approved a share buyback through tender offer route of 8.44 million equity shares, which represents 3.69% of the total equity of the company at a price of Rs 175/share on a proportionate basis. For the buyback, the stock turned ex-date on April 16.
For the first nine months of the FY2019, the sugar mill entity posted an improvement in the operating margin at 14.5% versus 13.9% recorded during the same period in FY 2018. This comes on the back of robust performance in distillery segment. Further, as per rating agency Crisil, the profitability from the segment is likely to be healthy over the medium term after the government increased prices of ethanol in FY19.
Also, in April 2019, CRISIL reaffirmed its ratings for the company's bank loan facilities and the commercial paper programme as 'CRISIL AA/Stable/CRISIL A1+' which is reflective of company's dominance in Northern India, diverse revenue profile, improving operating margins and reasonable financial risk profile.
The stock was trading at its highest level since December 6, 2017. At 1:26 pm, the stock quoted higher by 1.49% or up to Rs. 2.30 at Rs. 156.20 on the BSE.